Correlation Between Simplify Interest and Standpoint Multi

Can any of the company-specific risk be diversified away by investing in both Simplify Interest and Standpoint Multi at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Simplify Interest and Standpoint Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Simplify Interest Rate and Standpoint Multi Asset, you can compare the effects of market volatilities on Simplify Interest and Standpoint Multi and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Simplify Interest with a short position of Standpoint Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Interest and Standpoint Multi.

Diversification Opportunities for Simplify Interest and Standpoint Multi

0.41

Correlation Coefficient

Simplify Interest  Standpoint Multi

Very weak diversification

The 3 months correlation between Simplify and Standpoint is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Interest Rate and Standpoint Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standpoint Multi Asset and Simplify Interest is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Simplify Interest Rate are associated (or correlated) with Standpoint Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standpoint Multi Asset has no effect on the direction of Simplify Interest i.e., Simplify Interest and Standpoint Multi go up and down completely randomly.

Pair Corralation between Simplify Interest and Standpoint Multi

Given the investment horizon of 90 days Simplify Interest Rate is expected to under-perform the Standpoint Multi. In addition to that, Simplify Interest is 3.72 times more volatile than Standpoint Multi Asset. It trades about -0.01 of its total potential returns per unit of risk. Standpoint Multi Asset is currently generating about 0.02 per unit of volatility. If you would invest  1,305  in Standpoint Multi Asset on May 7, 2025 and sell it today you would earn a total of  10.00  from holding Standpoint Multi Asset or generate 0.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Simplify Interest Rate  vs.  Standpoint Multi Asset

Simplify Interest Rate

Risk-Adjusted Performance

Weakest

Over the last 90 days Simplify Interest Rate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Simplify Interest is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Standpoint Multi Asset

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Standpoint Multi Asset are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Standpoint Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Simplify Interest and Standpoint Multi

The main advantage of trading using opposite Simplify Interest and Standpoint Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplify Interest position performs unexpectedly, Standpoint Multi can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Standpoint Multi will offset losses from the drop in Standpoint Multi's long position.

The idea behind Simplify Interest Rate and Standpoint Multi Asset pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.